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Why a $2.7bn defamation lawsuit has Fox News running scared

The abrupt firing of Fox News presenter Lou Dobbs shows how much the Murdoch empire fears its latest legal battle. 

If losing one top-rated host amid a potentially existential legal quagmire looks unfortunate, losing two must surely look like recklessness – and yet that’s the position Rupert Murdoch finds himself in with Fox News, perhaps in its way the most powerful (and destructive) news brand in the world.

The first of those departures came with the 2017 firing of Bill O’Reilly, then the network’s 8pm host and for many years the anchor of its best-rated show. O’Reilly was facing a barrage of accusations of sexual harassment in the wake of the departure of the network’s founder Roger Ailes amid similar allegations. The pressure became too much for Fox News to keep even its most indispensable on-air talent.

The second departure was much more recent: last week Fox News Business abruptly announced it had parted company with Lou Dobbs, the channel’s best-rated and best-known host and a prominent Donald Trump backer.

[See also: From Page 3 to Dominic Cummings masks: the unlikely revival of the Daily Star]

The channel has insisted the departure was the result of a planned refresh to the schedule, but its timing is curious to say the least – coming just days after Dominion Voting Systems announced a $2.7bn defamation lawsuit against Lou Dobbs, several others, and Fox News itself.

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If people know anything about US defamation law, they know that it’s much harder for a claimant to win a libel case there than the UK, owing to protections granted by the First Amendment and US Supreme Court judgments. To win a libel suit a prominent public figure in the US would have to prove either malice – a deliberate attempt to harm the subject of the libel – or a “reckless disregard” for the facts. In other words, it’s not enough for an outlet to be wrong. They have to be spectacularly wrong.

The problem facing Dobbs, and perhaps his former employers, is that the accusations made against Dominion Voting Systems by its various detractors are indeed spectacular and wrong – allegations included that it was secretly founded by Hugo Chavez, helped to rig elections in Myanmar and Venezuela, flipped 2.7 million Trump votes to Biden, and more. 

Such allegations are serious, strike to the core of Dominion’s business, and have prompted threats of violence against the company, its executives and its staff. It should certainly be enough to get any US defamation lawyer worried – especially since while UK libel suits generally pay out mid-five or low-six figure settlements, US cases can run into the hundreds of millions or higher. 

[See also: How Robert Maxwell bullied his way into the establishment]

In 2016, the blog Gawker was driven into bankruptcy when Terry Bollea (better known as Hulk Hogan) won a $140m judgment against it after the blog posted a short extract of a video showing him having sex with a friend’s wife.

The Dominion lawsuit, then, is serious business – and the machinery at the top of Fox seems to be kicking into gear to try to see off the threat. Murdoch’s empire is not what it was, but he has a claim to owning almost the entirety of establishment Republican media in the US – the New York Post, Wall Street Journal and Fox News are all Murdoch-owned and all operate from the same Manhattan skyscraper.

But Murdoch’s stewardship of that empire in the last decade has been marked by constant existential legal threats. The first of these started in the UK itself, as a phone-hacking scandal initially apparently confined to just “one rogue reporter” was revealed to be endemic. 

As figures of increasing seniority, right up to James Murdoch himself, started to face questions over what they knew when, the company went into last-ditch defence mode – settling lawsuit after lawsuit (some with no merit whatsoever were still offered settlements, to avoid even a single day in court) and closing an entire newspaper in 2011 (the News of the World). Nonetheless, the scandal scotched hopes of the Murdochs completing a full takeover of BSkyB, and Sky News with it.

The second scandal was Fox News’ very own – the allegations against Ailes and then O’Reilly in turn, with the network’s two indispensable men suddenly finding themselves thrown overboard when the tides changed. Fox News’ ratings and revenues quickly recovered from the scandal – but it once again prevented Murdoch successfully taking over BSkyB.

Now the company’s battle-trained legal and compliance teams face their third epic challenge – and with it their wider implication in the last days of the Trump presidency and the abortive coup that defined its end. This time there is no chance of scuppering a BSkyB buyout – for Murdoch sold his company’s 39 per cent stake in 2018. James Murdoch can’t be dragged in this time, as he has departed his father’s company with veiled barbs at Fox News. 

But once again, when Fox News might want to focus on adjusting the Biden presidency – and on a generational shift of power at the top of the company – it is instead left, once again, tackling the consequences of its own actions. Can it escape one more time?

[See also: Why the Foxification of the British media must be resisted]